The Equity Analyst Team is a student organization within the Johns Hopkins Carey Business School. This exclusive investment management organization is designed to create graduate students that bring both hands-on experience and theoretical knowledge to their future employers. The members are hand-picked, interviewed, and put through a rigorous program.

Acer Inc.(Acer) is an information and communication technology company.The Company provides its products under the brands named Acer, Gateway, Packard Bell and eMachines, including Personal computer, LCD monitor, server, projector, tablet PC, smartphone, and ICT devices. The company is also developing AcerCloud application and services.

In the past five years earning, steady increase from 2008 to 2010, peaking at 2010 profit of 15,118. Big drop from 2010 to 2012. Negative earnings on 2011 and 2012 which are -6602 and -2910.Strategy is wrong.

Problem:1. Acer did follow the IT trends and satisfy the customers’ needs.For example: Consumer interest in tablet computers, sparked by Apple’s introduction of the iPad, hurt demand for Acer’s own laptops and spurred it to its first loss in a decade in 2011.2. Acer did not make the correction decision over the past two years. Windows 8 and Ultrabooks, neither of which could help combat declining PC sales.3. Impairment loss of NT $ 9.9 bn on goodwill, trademark and customer relationship.

Positive news:Acer Founder Stan Shih returned to run the company he started in 1976. It is sounds like the Steven Jobs return to the apple and then help apple success through lauching iphone, ipod and touch products. I really doubt it.2 reasons:1. Situation is different, after Steven Jobs were fired by Apple; Apple was not as bad as Acer right now. 2. Market is different. Today’s PC market is much competitive than 10 years ago.3. Acer is not Apple.

Suggestion:1. Although founder Stan Shih returned the company, the company should focus more on strategies on branding, product, and market.2. Restructuring the company, cut the PC parts, focus more on tablets, and could

Financials:-Inventory: accounts for 28% of current assets and 22% of total assets at the end of Q3 2013, compared to 20% and 16% at the beginning of 2012-Operating revenue declined over 30% from 2010 to 2012.-Operating income declined from NT $18 billion in 2010 to negative NT $6 billion in 2011 and NT $1 billion in 2012. -EPS declined from 5.71 in 2010 to negative 1.07 in 2012. -ROE declined from 16.17% in 2010 to negative 3.86% in 2012.

Acer has two fairly simple product lines. The company generates over 80% of the revenue from Personal Computers, and less than 20% from Computer Peripherals and Others. Just like any other industry competitors, Acer’s PC product line includes notebooks, desktops, tablets, and all-in-ones. It also sells monitors and projectors in the Peripherals business, and AcerCloud service as well.

After Acer’s revenue peaked in 2010, it declined 22% in 2011, and 11% in 2012. Strategy-wide, Acer failed to make sufficient investment in developing its tablet and smartphone portfolio. According to Bloomberg Industries data, Global computer revenue dropped 6.4 percent in 2012, and is projected to further decline this year. It’s just not possible for any company in the computer hardware business to sustain its growth by simply relying on selling personal computers. Hewlett-Packard has essentially switched to sell solutions to enterprise in 2011. IBM has done so decades ago, and completed discontinued its PC line in 2010 after selling off ThinkPad to Lenovo. Dell was just taken private, with a plan to move from offering computers only to delivering complete solutions for enterprise customers. Lenovo has seen rapid growth in the PC market in recent years, but not only it is the largest PC vendors, it is also the third largest “Smart Connected Device” maker, covering PCs, smartphones and tablets. Lenovo is executing an effective PC Plus strategy, which calls for expanding the portfolio in smartphones and tablets. Apple and Samsung both have a strong portfolio in smart phones and tablets.

In the developed markets, which is Europe and North America, Acer has an image problem. Just like Lenovo’s purchase of ThinkPad, Acer acquired Gateway in 2007 to enter developed markets and expand globally. But unlike ThinkPad, Gateway had a low-end, cost-effective image. Gateway started on a farm outside Sioux City, Iowa, essentially used a direct sales model copied from Dell, and playing up its Iowa roots by shipping computers in spotted boxes patterned after cow markings. It didn’t help build a positive, high-end image for Acer. When a company coming from an emerging market tries to enter a developed market by acquiring a brand in a developed market, it’s best to target a brand with high-end image. Lenovo has recently partner with Ashton Kutcher, a rising star in Hollywood. Acer has done exactly the opposite. It definitely has hurt Acer’s competitive image, positioning, and pricing power.

In the emerging markets, Acer failed to sell its products through resellers. As a comparison, Lenovo has partnered very well with local resellers, penetrating the market with multi-layers of channels with multi-levels of markets, including the second-tier, third-tier cities, and rural towns.

As a brief summary, Acer failed to diversify its product portfolio, does not have a strong tablet and smartphone product lines, didn’t bother to raise its image in developed markets, and failed to cooperate with local resellers in emerging markets. I won’t touch Acer’s stock.

I thought it was going to be some boring old post, but it really compensated for my time. I will post a link to this page on my blog. I am sure my visitors will find that very useful.Hp Notebook repairs &Benq Projector repairs

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The opinions expressed here are solely that of the author. This is not intended to be relied up as a forecast, research advice, recommendation, or solicitation to buy or sell any securities. The opinions expressed are as of the date above and are subject to change. The information is derived from sources deemed to be reliable, and are not guaranteed as to accuracy. The information contained in this paper is based upon or derived from information generally available to the public from sources believed to be reliable. Past performance is no guarantee of future results. Reliance upon information in this material is at the sole discretion of the reader.